If you are a trader and often follow the news to trade news, the Forex economic calendar will no longer be a strange concept. In fact, the Forex economic calendar plays an important role in the trading performance of traders. With important information from the calendar, traders can control transactions promptly.

So what does the Forex economic calendar mean to traders? And how to use the calendar effectively?

 

What is the Forex economic calendar?

The Forex economic calendar is an important information table about upcoming economic data releases. It includes information such as Inflation (CPI), Gross Domestic Product (GDP), Unemployment claims, House Price Index (HPI), ... And many other economic indicators. As a consequence, the necessity of the Forex economic calendar to Forex traders cannot be denied.

On the other hand, there are many factors affecting the Forex market, and traders need to grasp them in order to have a lot of good trading opportunities. In addition, the news will have different levels of importance in the calendar such as low, medium or high. In other words, news with more meaning will have a greater impact on the Forex market.

Not only that, this information has a major impact on the price of currency pairs. Therefore, Forex traders often look at the Forex economic calendar to know in advance the economic data which be released and they can prepare the appropriate trading psychology.

On the other hand, traders can easily find and use the Forex economic calendar from many different places on the internet. Some brokers have the Forex economic calendar for traders to analyze like ForexFactory, Investing, or Fxstreet...

Why should traders look at the Forex economic calendar?

The Forex economic calendar helps traders keep up to date and grasp important news in the Forex market. This helps them prepare appropriate trading plans. Here are some clear reasons why a trader should use the Forex economic calendar:

1. Update news quickly and accurately: you can search for information from anywhere on the internet, but the information will be updated slowly and may not be fully complete. In contrast, you can rest assured with the data from the Forex economic calendar because these calendars will quickly and fully update information in the Forex market.
2. News trading must use the Forex economic calendar: Obviously, news trading requires a lot of information from the Forex market. With the Forex economic calendar, when important economic data is released, traders can quickly enter the market to trade according to the general trend of the market. This helps increase the success rate in news trading.
3. Better control emotions when trading Forex: By knowing in advance the economic data to be released and the market's reaction, traders will not be surprised and have an overreaction. Therefore, the calendar will help them make trading decisions calmly and not be affected by emotion.

Guide to using the Forex economic calendar

There is no doubt that reading the Forex economic calendar is extremely easy and does not take too much time for traders. Here is a clear structure of a Forex economic calendar as well as this was set up in a single table:

Day - The date of publication of relevant news is planned

Time left - Time before the event

Event - The name of the event. If you want to view detailed information, click the left mouse button on the event

Impact - The level of impact, showing how specific news affects the currency

Previous - Previous value

Forecast - Forecast value

Actual - Current value

Time zone - Here investors Forex can choose the time zone.

The above is the information that traders need to note when viewing the Forex economic calendar. With different plans and markets, each trader will view and use this information differently. If you continue to follow this article, you will receive methods to effectively use the calendar.

How to use Forex economic calendar effectively

Obviously, if traders do not know how to use the calendar in the right way, they will not increase their success in Forex trading. To use the Forex economic calendar effectively, traders need:

Identify important data

Traders need to identify which economic data has a significant impact on the Forex market they are interested in. For example, GDP, inflation, and unemployment rate,... To easily follow, traders can mark these important data on the Forex economic calendar.

Closely monitor the Forex economic calendar

After identifying important data, traders need to closely monitor the Forex economic calendar to know in advance when these data are released. This helps them prepare psychology and trading plans accordingly.

Carefully analyze economic data

After financial information is released from the Forex economic calendar, traders need to carefully analyze the economic data to assess the impact on the market. In addition, they also need to have appropriate trading plans. If the data is higher than forecast, the price is likely to rise, otherwise, the price will decrease.

Quickly enter the market

By analyzing the economic data and assessing the market trend, traders need to quickly enter the market to take advantage of the opportunity. In other words, this is an important step to profit from trading news through the Forex economic calendar.

Closely monitor market developments

In practice, traders need to closely monitor market developments to assess whether the market reacts as initially predicted. If the reaction is stronger than predicted, you should exit early to preserve capital, otherwise, you should maintain the transaction to maximize profits.

Place Stop loss orders

When participating in the market, traders need to place Stop loss orders to limit risks. Stop loss orders will automatically close transactions when the market moves contrary to initial predictions. This is a way to preserve capital when trading news.

Place Take profit orders

When the market develops as initially predicted, traders need to place Take profit orders to automatically close transactions when reaching the desired profit level. This helps traders control emotions and not miss opportunities to profit.

Evaluate trading results

After completing a transaction, traders need to evaluate the results to learn from future transactions. Issues to evaluate include analyzing economic data, monitoring the market, and risk management,... As a consequence, this will help traders improve their skills in trading news.

In addition, you can also refer to ways to trade news and the impact of news on trading to better understand the usefulness of news in the Forex market.

Most news can impact the market

Although you have already known the importance of news on the calendar, how can you know which news will be the most effective?

 Indeed, there is a lot of news that appears on the economic calendar every day. Not only that, each piece of news will have a different meaning and impact on the Forex market. 

According to the explanation of the calendar’s table above, the impact of each piece of news will have different levels, from low to high. With a higher level in the impact column, the news will have higher effectiveness in the Forex market.

Nevertheless, there is some news that traders are able to notice, even if these have a high or low impact:

• Change of main interest rates.

• Change in jobs and unemployment.

• Inflation data.

• The economic growth of the country.

• Index of business operations in different areas of the economy.

On the other hand, statistics of expert forecasts will also have a significant impact on the fluctuations of the market. Therefore, you will have more trading opportunities, if you know how to use news on the economic calendar. 

Summary

For Forex traders, the Forex economic calendar is a necessary tool and plays an important role in transactions. This calendar will help traders a lot in finding trading opportunities as well as limiting losses when the market fluctuates. Therefore, traders should understand the Forex economic calendar and use this tool proficiently when participating in the Forex market.

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